A request for an emergency injunction to prevent Augusta’s city administrator from immediately signing a contract for employee health insurance was denied Friday afternoon.
In his ruling denying the motion filed by Meritain Health, Superior Court Judge J. David Roper said that the Augusta Commission is set to vote on the company’s bid protest next week and that the decision needs to be made before any legal challenge.
Roper cautioned city officials present Friday that the city could be at risk if it signs a contract with Blue Cross Blue Shield before the issue of Meritain’s bid protest is concluded.
On behalf of the city, attorney Jody Smitherman told the judge that although City Administrator Fred Russell is negotiating with Blue Cross Blue Shield, he will not sign a contract unless the city has an escape clause to void the contract if Meritain prevails.
Meritain’s local counsel, William Keogh, argued that the commission’s decision last month to award the contract to Blue Cross Blue Shield was made with only half the facts and after an unfair bidding process.
Keogh argued that Meritain’s bid was rated the highest quality and at the lowest cost by the city’s selection committee, but then the city asked for a new pricing system. To accurately determine that new price, the bidders needed more information – information that only Blue Cross Blue Shield had because of its previous health coverage of city employees.
Smitherman said the city sought additional pricing information because commissioners were most concerned about the full possible liability the city faces as a self-insurer.
Blue Cross Blue Shield came out better with that cost, and the city learned Meritain would charge additional fees for several services, she said.
The request for additional information had nothing to do with the city’s health insurance consultant’s personal relationship with an employee of Blue Cross Blue Shield, which commissioners knew about before their vote, Smitherman said.
“The last thing we need is 4,700 people running around without health benefits,” she said.
If the city and Blue Cross Blue Shield enter into a contract and the commission or the courts find the bid protest should be granted, the contract would be voided and the bid process would have to begin from scratch, which could take months.